EUROPE MARKETS: European Stocks Push Higher As Yellen's Remarks Point To Confidence In Growth

By Carla Mozee, MarketWatch

Vivendi, Mediaset tussle continues; Volkswagen reaches U.S. dealer agreement

European stocks swung higher Thursday, with investors taking remarks from Federal Reserve Chairwoman Janet Yellen as a signal of confidence in economic growth worldwide.

The Stoxx Europe 600 was up 0.6% at 344.15, but it had been creeping shortly before text of Yellen's speech in Jackson Hole, Wyo., were released. All but the health care sector was moving higher.

Yellen, who was appearing at the Fed's summer summit, on Friday signaled that the U.S. central bank is preparing to increase interest rates as soon as next month.

"In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months," she said.

From the European markets perspective, "if the Fed starts to hike interest rates, it shows that there is at least some sustained and sustainable economic growth in what is the world's largest economy," said Richard Hunter, head of research at Wilson King Investment Management.

That "should have a positive effect on other economies because the chase for economic growth is the big conundrum at the moment," he said.

Read:The head of Germany's Deutsche Bank says negative rates are 'fatal' (http://www.marketwatch.com/story/the-head-of-germanys-largest-bank-says-negative-rates-are-fatal-2016-08-25)

Stocks in Germany, Europe's largest economy, were higher, leaving the DAX 30 up 0.4% at 10,573.25 after trading in the red earlier in the session. France's CAC 40 was up 0.4% at 4,445.21.

With the dollar edging up after Yellen's remarks, the euro exchanged hands at $1.1269. That's down from $1.1281 late Thursday in New York.

The Stoxx 600 was on pace to rise 1% for the week, which would come after last week's pullback of 1.7%.

Fund-tracker EPFR on Friday said more than $2 billion flowed out of European equity funds in the week ended Wednesday. That marked the 29th consecutive weekly outflow, extending the longest redemption streak on record.

Movers: A fall in shares of Vivendi SA (VIV.FR) was helping keep the pan-European benchmark headed toward its second daily loss in a row.

Vivendi tussle: In focus Friday was Vivendi SA (VIV.FR), whose shares slumped 2.3%. The media company's second-quarter adjusted earnings fell 3.1% to 187 million euros ($211 million), missing analyst expectations. Vivendi said it's cutting EUR300 million in costs from its pay-TV unit Canal Plus.

At the same time, shares of Mediaset SpA (MS.MI) fell 0.4% after Vivendi, which has been seeking to amend an agreement with Mediaset (http://www.marketwatch.com/story/vivendi-plans-costs-cuts-at-tv-unit-2016-08-26) to buy its pay-TV business, said Thursday the contract could become void Sept. 30. Mediaset reiterated that the contract is binding and that it remains unwilling to change the terms of the deal.

Other movers: Gemalto NV (GTO.AE) shares surged 7.3% after the SIM card maker's quarterly results came in above expectations.

Volkswagen AG (VOW.XE) picked up 2.9% after the German auto maker reached an agreement with about 650 U.S. franchise dealers (http://www.marketwatch.com/story/vw-strikes-deal-with-us-franchise-dealers-2016-08-26) affected by the company's diesel-emissions scandal. A Sept. 30 deadline was set to complete the details.

Amec Foster Wheeler PLC (AMFW.LN) shares leapt 6.4% after Morgan Stanley upgraded its rating for the energy engineering company to overweight from equalweight.

BAE Systems PLC (BA.LN) rose 2.5% after the defense company's rating was upgraded to buy from hold at Berenberg.

Indexes: Italy's FTSE MIB was up 0.6% at 16,816.33, while Spain's IBEX 30 picked up 0.6% at 8,652.00. The U.K's FTSE 100 was up 0.4% at 6,846.67.

Data:Lending to eurozone firms increased (http://www.marketwatch.com/story/ecb-data-show-rise-in-eurozone-lending-to-firms-2016-08-26) at a faster yearly pace in July than in the previous month, European Central Bank data showed, potentially reducing the need for further monetary stimulus.

Consumer confidence in France rose to 97 in August from 96 in July (http://www.marketwatch.com/story/french-consumer-confidence-ticks-up-in-august-2016-08-26), while economists had expected no improvement, Insee said Friday. In addition, France's gross domestic product stalled in the second quarter, according to a second print from the statistics agency. The economy expanded by 0.7% in the first quarter.

GFK said German consumer sentiment is expected to improve (http://www.marketwatch.com/story/german-consumer-confidence-set-to-rise-gfk-2016-08-26) in September, and that could mark short-lived concerns about the impact of Brexit on Europe's largest economy.

(END) Dow Jones Newswires

August 26, 2016 11:24 ET (15:24 GMT)

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